FCA reports over £27 million lost to crypto and forex scams
The Financial Conduct Authority (FCA) and Action Fraud today sent a warning to the public to be wary of investment scams. This warning comes as cryptoassests and forex investment scams in the UK tripled last year to over 1,800. Fraudsters promise high returns from investments in crypto and forex, with victims losing over £27 million in total in 2018/2019.
Fraudsters often use social media to promote their get-rich-quick schemes, with fake celebrity endorsements and images of luxury items like expensive watches and cars. These then link to professional-looking websites where consumers are persuaded to invest.
Investors will often be led to believe that their first investment has successfully made a profit. The fraudster will then contact the victim to invest more money or introduce friends and family with the false promise of greater profits. However, eventually the returns stop, the customer account is closed and the scammer disappears with no further contact.
Mark Steward, Executive Director of Enforcement and Market Oversight, FCA, said: “We’re warning the public to be suspicious of adverts which promise high returns from online trading platforms.
“Scammers can be very convincing so always do your own research into any firm you are considering investing with, to make sure that they are the real deal. Before investing online find out how to protect yourself from scams by visiting the ScamSmart website, and if in any doubt – don’t invest.”
CoinMetro CEO: This is the same old fraudulent activity in a new guise
Kevin Murcko, CEO of cryptocurrency exchange CoinMetro, commented on the research: “Criminals follow the money, and this report from the FCA shows they are taking advantage of consumers’ lack of understanding about crypto assets. If you’ve heard about Bitcoin on the news but don’t know how to invest, you might be tempted by the offers.
My personal background is foreign exchange brokerage and the same scams have been operating in forex since long before cryptocurrencies hit the headlines. It is about targeting individuals with promises of high profits. The fact that the FCA has now grouped together crypto and forex fraud just goes to demonstrate this is the same old fraudulent activity in a new guise.”
“The key message for investors is to always do your own research, and if an investment sounds too good to be true, it probably is.”
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